Bally’s Reports Increased Revenue, Lays off Employees

Article by : Erik Gibbs Nov 2, 2023

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Despite achieving a record-breaking third-quarter revenue of $632.5 million, marking a 9.4 percent improvement over the previous year, Bally’s Corp. fell short of profitability by $61.8 million.

In a potentially related move, the company announced the elimination of 300 positions, shifting responsibility for its interactive operations to White Hat Gaming. Bally’s stock saw a nearly 16 percent drop on the New York Stock Exchange, reaching $7.70 at the time of reporting.

During the announcement, company executives emphasized the “successful soft launch” of Bally’s Casino at Chicago’s Medinah Temple.

The temporary casino attracted 157,000 visitors and ranks as the second-highest-grossing casino in Illinois, behind only Rivers Casino Des Plaines, achieved without any marketing expenses.

George Papanier, Bally’s President, initially cited a “three-month delay” in the opening of the temporary casino, attributing it to Illinois regulators.

Papanier later commended the positive trends in week-over-week volumes, expressing confidence in the anticipated $50 million annual cash flow from the temporary venue, which will remain operational until September 2026. The company highlighted Las Vegas, Atlantic City, and Evansville as areas of underperformance.

The Indiana casino was negatively affected by the proliferation of historical-horse-racing machines in Kentucky, while Las Vegas faced uncertainty about the Tropicana’s future, leading to customer and employee attrition to rival casinos.

Bally’s executives mentioned a “holding pattern” for, or, as CEO Robeson Reeves stated, “eagerly awaiting” Major League Baseball’s upcoming vote on the potential relocation of the Oakland Athletics to Las Vegas.

If approved, the team’s move would necessitate the construction of a new stadium on the Tropicana’s current site, while the resort’s future remains uncertain.

VP of Strategy and Investor Relations Jeff Glover stated that assessing the resort’s competitive position would depend on further clarity regarding the Athletics’ plans.

Reeves underscored that Bally’s had acquired the esteemed Tropicana resort for just $150 million.

Chairman Soo Kim pointed out that the Tropicana was already profitable when purchased by Bally’s, and its asset value has continued to appreciate.

When pressed by a stock analyst about potentially selling the Tropicana lease, Glover acknowledged its significant current value, indicating a willingness to consider selling it at the right price.

The leadership team expressed optimism for the coming year, with a particular emphasis on online sports betting as a pathway to iGaming, the company’s current focus.

Reeves highlighted the company’s prudent financial approach and the positive returns generated by iGaming. The resumption of smoking at Bally’s Shreveport was cited as a revenue booster, and the interactive division is expected to reach a breakeven point by 2025.

Bally’s continues to pursue a casino megaresort in New York City, with local support for development at the former Trump Links at Ferry Point.

The company’s 2024 goals revolve around expanding in the Chicago market, growing the North American interactive market and increasing global awareness of the Bally’s brand.

CFO Glover provided revised earnings guidance for the year, with revenue projections now ranging between $2.4 billion and $2.5 billion and cash flow expected to reach $640 million to $650 million. Despite competitive pressures, the company remains confident about 2024.

Regarding spending priorities between Chicago, Las Vegas and New York City, Kim noted that Chicago had the highest priority, with New York considered further out. Kim reassured that capital would not be an issue and decisions would be rational and mindful of shareholders.